Hey, one other interesting metric.
FAIRX during last two market cycles Apr '00 - Sep '07 and Oct '07 - Present (thru 1Q14):

Despite the volatility since 2007, it remains in top quintile of risk adjusted return. Can also see a lot more volatility in this cycle versus previous cycle.
Liking full cycles numbers more and more these days...hoping to add them soon to Risk Profile search tool.
And here is M* performance plot, current cycle:

Versus 3 year plot:

Unless you are one of those investors who believes the price of things doesn't matter, it would probably be a good idea to do a "re-check" on the price of your holdings, esp. the MOMO stuff.
http://www.zerohedge.com/news/2014-05-08/what-pe-ishares-biotech-etf-it-depends-whether-you-read-fine-print

365 brand is designed to make WF a one stop destination for groceries and is low margin. The last recession seems to have changed consumer behavior in the upper middle and upwardly mobile class that frequent WF. It is becoming much more common for people to visit two or more places for their grocery and produce needs. Trader Joe's where available is benefitting. I see far less filled cart shoppers in WF than before the recession.
The other change seems to be the traffic decline in their highest margin item, prepared foods.
Interesting changes. Not sure how much of it is permanent and whether WF can continue with its current structure or has to reinvent itself over the next few years like Starbucks is struggling to do.
They definitely had a good thing going for a while.

In many areas, Sprouts Farmers Market has been taking away customers from Whole Foods as a cheaper alternative. They provide a WF like atmosphere without the high prices of WF and the grunginess of Walmart or Target even if the latter sell organic. Important for the people who typically go to WF.
But I am not sure Sprouts can survive given the small amount of traffic and almost no marketing at least in my area. It seemed like they started out strong, did an IPO and have been going downhill since then.
The problem with WF seems similar to Apple, they have saturated the premium market and have margin pressures from competition without anything new to offer. The quality of produce in my area has suffered for the prices they charge. Local weekend farmers markets have become the destination of choice for the affluent that previously went to WF for weekly produce.

It's funny you say that because I was also pondering the Apple comparison after skimming the WF conference call transcript. They talk about promoting "value" more, but I didn't get the sense they really wanted to/had an idea of how to go about it.
Whole Foods has their 365 brand, which is actually reasonable. Yet, they really don't promote it at all. Maybe I didn't see discussion of it in the transcript, but when asked about promoting value by an analyst, they went off on something about salmon. Yet, they have all of these 365 value items - tons of them throughout the store.
There is a farmers market nearby that is amazing - significantly better produce than I'm seeing at WF or other such stores, and it's much cheaper - but it's only 4 months out of the year. I was getting so much at the farmer's market last year that I hurt my back/shoulder a couple times.
I do think that there's an increasing amount of competition, both nationally and regionally. I actually like Fresh Market a great deal - I actually think their produce is better, although it is similarly priced. The rest of Fresh Market is more reasonable and I like the look and feel of the store. Additionally, FM often shifts its products, they seem to have new things all the time and there's often good clearances on quality products.
Costco is also having a little more in the way of organic products.

Here's some granular data on bank loans and the games already being played with them. The extent of it was surprising to me.
http://blog.alliancebernstein.com/index.php/2014/05/06/bank-loans-is-the-yield-worth-the-chase/

http://www.mutualfundobserver.com/discuss/discussion/12630/thoughts-on-otter-creek-long-short-otcrx/p1
Nod to rsorden .After a month travelling out west, opened a new position in OTCRX after reading above post and a little home work.From the prospectus:(emphasis added)
'The Fund employs a “long/short” investment strategy to attempt to achieve capital appreciation and manage risk by purchasing stocks believed by the Advisor to be undervalued and selling short stocks believed by the Advisor to be overvalued. The objective of the Fund is to generate absolute risk-adjusted returns with a focus on long-term capital appreciation with below average
volatility by investing in opportunities both long
and short which are driven by intensive
fundamental analysis. Under normal market conditions, the net long exposure of the Fund (gross long exposures minus gross short exposures) is expected to range between -35% and +80% net long.
The Fund may also invest in investment grade fixed income securities, including up to 30% of theFund’s assets in corporate and convertible bonds as
well as debt issued by the U.S. Governmentand its agencies. Additionally, up to 30% of the Fund’s net assets may be invested in high yield (“junk bonds”).
High yield bonds are securities rated by a rating organization below its top four
long-term rating categories or unrated securities determined by the Advisor to be of equivalent quality.
The Fund may utilize leverage of no more than
30% of the Fund’s total assets as part of the
portfolio management process. From time to time, the Fund may invest a significant portion of
its assets in the securities of companies in the same sector of the market.
The Fund may also invest up to 10% of its net assets in derivatives including futures, options, swaps and forward foreign currency contracts. These instruments may be used to modify or hedge the Fund’s foreign currency contracts. These instruments may be used to modify or hedge the Fund’s
exposure to a particular investment market related risk, as well as to manage the volatility of theFund. "
http://www.ottercreekfunds.com/media/pdfs/Summary_Prospectus.pdf
Pretty much a go anywhere fund with the ability to leverage! With only $17+million in assets it has performed quite well Y T D .Can it execute the strategy as its assets increase?
Nice updated Fact Sheet.
http://www.ottercreekfunds.com/media/pdfs/OCL_Factsheet.pdf

Holy sh...

I did not realize...did not pay as much attention to after hours numbers, but in this case...wow.

Wednesday, May 7, 2014
Editor's Corner
What Happens When The Fed Stops Buying And Starts Selling?
Ron Rowland
The Fed Chair Janet Yellen testified to the Joint Economic Committee on Capitol Hill today. She revealed no surprises and generally stuck to the same script that has been in use for months. While basically optimistic on the economy, she reiterated concerns about the labor market, lack of inflation, and disappointing housing activity. She believes the lackluster first quarter GDP figures were mostly weather related and sees signs that spending and production are rebounding.
The Fed’s monthly reductions of asset purchases this year have been based on its assessment the economy was strong enough to support labor market improvements. Yellen reminded everyone that this tapering operation was still adding to the Fed’s holdings, and they in turn were helping apply downward pressure on long-term interest and mortgage rates.
Last year, the market reacted negatively to the idea of the Fed tapering its monthly purchases of Treasury and mortgage-backed securities. Tapering is one thing, but what happens when the Fed starts to reduce its balance sheet? This is seldom discussed, but today Ms. Yellen stated the Fed does in fact expect to shrink its balance sheet over time.
Outright sales of mortgage-backed securities are not planned, with the possible exception of eliminating some residual holdings. Instead, balance sheet reduction will occur by not reinvesting the proceeds the Fed receives when current holdings mature. Although the Fed intends to avoid sales of mortgage-back securities, no such assurances regarding Treasury securities were offered today.
Earlier this year, with the unemployment rate hovering around 6.7%, the Fed eliminated its 6.5% line-in-the-sand regarding when it would begin considering the reduction of monetary stimulus. The reason for this change was the belief the unemployment rate didn’t fully reflect problems within the labor market. Last Friday, the Bureau of Labor Statistics released its April employment reports, and the official unemployment rate plunged a staggering 0.4% to 6.3%.
Today, Ms. Yellen again emphasized that labor markets are still far from satisfactory. People out of work for more than six months and those only able to find part time work remain at historically high levels. The declining participation rate is also a concern, as another 988,000 people left the labor force in April. For these reasons, she believes the Fed was correct in removing the 6.5% threshold.
Markets reacted favorably to all this, giving the relatively new Fed Chief an implicit seal of approval. The Dow Jones Industrial Average climbed more than 117 points, and the 10-year Treasury yield dropped back below 2.6%.
Sectors
Energy and Utilities have been swapping places for the lead the past four weeks, and Energy came out on top today. Utilities had a setback last Friday with earnings misses and downgrades among prominent constituents. The sector is bouncing strongly today and is well on its way to reclaiming the top spot from Energy. Real Estate and Consumer Staples hold down the third and fourth spots for the fourth week in a row. Telecom jumped four places after falling the same amount the prior week. Unfortunately, the group looks like it may not be able to maintain its upward momentum, making it vulnerable to downside action. Materials and Industrials have been hanging out in the middle of the rankings for more than a month now. Technology is another sector on the verge of slipping into a negative trend. The selling in biotechnology stocks seems to have subsided for now, but the Health Care sector is still struggling to regain its footing. Earnings out of the Financials haven’t been offering much hope for the group. Consumer Discretionary continues to encounter setbacks and remains mired at the bottom of the heap.
Styles
Although three pairs of style categories swapped positions, very little has changed. Large Cap Value remains at the top but seems to be settling into a mostly sideways pattern. Mid Cap Value exchanged places with Mega Cap to recapture second place after a one-week absence. Large Cap Blend, Mid Cap Blend, and Large Cap Growth continue to hold down the middle. Mid Cap Growth and Small Cap Value comprise our second pair of categories swapping places. Mid Cap Growth came out ahead this week and even managed to generate a slightly positive momentum reading. Small Cap Blend remains in a negative trend near the bottom of the rankings. Micro Cap slipped below Small Cap Growth to take over last place. Seven weeks ago, Micro Cap was at the top, but now the tables have turned.
Global
We have been commenting for many weeks about the late March surge for Latin America. Since then, it has been digesting those gains and unable to break out of its long-term downtrend, until now. Brazil and Mexico are currently providing the strength for Latin America funds. The U.K. continues to get a currency translation boost, allowing it to climb two spots to second place. Canada strengthened its grip on third place with gains in both equity prices and the Canadian dollar. Pacific ex-Japan slipped two places to fourth as stronger groups moved ahead. The next five categories are keeping the same relative rankings and nearly identical momentum readings as last week. Europe heads up this group of five, followed by Emerging Markets, EAFE, World Equity, and the U.S. Two global categories are in the red, and this week they swapped positions with China replacing Japan at the bottom.
Note:
The charts above depict both the relative strength and absolute strength of various market sectors, styles, and geographic locations on an intermediate-term basis. Each grouping is sorted (top to bottom) by relative strength. The magnitude of the displayed RSM value is a measure of absolute strength, which is our proprietary method of measuring and reporting the intermediate-term strength as an annualized value.
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@Maurice. Regarding what you said, "When I first was looking at FAIRX more than 10 years ago, Berkowitz had at least a third of the fund invested in Berkshire Hathaway. So if this style of investment makes you queasy, I can understand that. But Berkowitz's style hasn't changed a lot, since the fund was started. He has been consistent. Isn't that a characteristic that most of us want to see in mutual fund manager?"
+++++++++++
I think Berkowitz investing a significant amount in Berkshire Hathaway is different, because Berkshire Hathaway is more like a mutual fund than a typical individual stock, since there are so many stocks owned by Berkshire Hathaway, as well as very many wholly owned companies such as See's Candies, Nebraska Furniture, etc. So it's like owning a mutual fund run by Warren Buffett. I was in FAIRX for 11 years, and don't recall how much Berkshire Hathaway was in FAIRX, but it didn't approach the 52% that was in AIG not that long ago. The Sequoia Fund used to regularly hold large positions in Berkshire Hathaway for many years.
I'm not sure Berkowitz has been consistent. I kept tabs on him for many years; my take is that he has changed. I see the portfolio as significantly more risky than in years past, both in terms of the percentage concentration in individual names, concentration in the financial sector itself, and the riskiness of some of the individual names, such as Sears, St. Joe, Fannie and Freddie. In my opinion, investing in Sears, St. Joe, Fannie and Freddie is not consistent with having Rule Number 1, Don't Lose Money; Rule Number 2, Don't Forget Rule Number 1. No one knows what is going to happen with Fannie and Freddie. Clearly, it's quite possible to lose one's entire investment in them, if the government carries through it's plan to dissolve the companies, although I doubt that happens. My guess is that Bruce wins big time with them, but they are clearly not investments for someone whose Rule Number 1 is Don't Lose Money. Just not consistent. Probably Bruce wins with all four of those names, as well as with his ultra concentrated bet on AIG, but you don't invest this way if your first rule is don't lose money. He needs to change his talk to match his walk.

FYI:
Regards,
Ted
http://www.marketwatch.com/story/us-stocks-end-higher-nasdaq-trims-losses-2014-05-07/print?guid=E6C11479-EC0D-4301-8B38-FCB0542051FA
http://online.wsj.com/news/articles/SB10001424052702304885404579547522674452590#printMode
Major Stock Indexes: http://markets.wsj.com/us

Anyone who likes this kind of strongly opinionated and focused play should, I'd suggest, take a position in CGMFX, and FLVCX too, though Soviero does diversify significantly compared with Berk and Heebner.

@davidmoran: Interesting comment. I would guess that CGMFX and FAIRX are the two most 'focused'/concentrated/non-diversified mutual funds out there today. I think you hit it right on, that both Heebner and Berkowitz are strongly opinionated, and it seems to me they have some parallels too. IIRC, Heebner had extraordinary performance results with CGMFX for the first many years since inception. Truly amazing, not unlike Berkowitz's success at FAIRX from inception through the end of 2010. Then after his success in 2007, Heebner fell down hard, and has yet to get back up again. Berkowitz fell down very hard in 2011, but did very well in 2012 and 2013.
Interesting that they both started their funds at inauspicious times (years), leading up to the big bear that started March 15, 2000, and both had unexpectedly positive performances during that bear.
I'm surprised Heebner has stayed down this long. He's highly educated, and apparently fanatically passionate about investing, to the exclusion of almost everything else. He rarely takes a vacation. Hard to explain the turnover in his fund. He's really much more of a trader, his turnover is that high. I think Heebner is super smart and knowledgeable. He was just recently on WealthTrack with Consuelo Mack, and I was impressed with him. He seems to me to be a gambler with his investments, but I'm sure he sees that very differently.
As stated elsewhere, I believe Berkowitz will beat the market over the long term. I'm just not going to take that ride along with him anymore. Perhaps all the fame and adulation he received over the years, and all that goes with being the recipient of the Morningstar Equity Manager of the Decade in 2010.....I think that may have changed Bruce. He became a Rock Star; he became possibly the most famous mutual fund manager still actively managing a fund.

FYI:
Regards,
Ted
http://www.thereformedbroker.com/2014/05/06/ten-surefire-trading-rules-to-make-you-rich/

FYI:
Regards,
Ted
http://www.reuters.com/assets/print?aid=USBREA4603Y20140507

What can I say, I've drunk the kool-aid, I'm sticking with the guy. I've been in FAIRX long enough (8 years) that despite the underperformance of the last 5 years, I'm up a lot compared to the S&P. You certainly can't accuse of him of index-hugging; the man does deliver active management, and he's got pretty much his whole wealth in his funds. I think he personally opens something like 40% of FAAFX.
Warren Buffett says he only gets one or two really good ideas a year, then he sticks with them a long time. That's how I see Berkowitz. And I think that's the only chance a fund manager (or fund investor) has for serious outperformance.
The fewer funds, the better -- if you can pick the right funds. And that goes for stocks too: the fewer stocks, the better, if you can pick the right ones.
But yes, FAIRX is a different fund than it was in 2006, when it was well diversified and had great downside protection. It's become a fund to lock away for 10 years.
And no, I don't understand the SHLD investment, but if it were easy to understand, everyone would be making it.
FAAFX and FAIRX between them are about a quarter of my equity mutual fund portfolio. Time will tell if that is wise. FAAFX is still underperforming the S&P since inception, but I am a patient man.

Bruce once stated he managed his portfolio as if his clients had all of their money invested with him (Wealthtrack interview). In late 2010, I noticed he changed the portfolio drastically; I sold. Fortunately, I did not get hurt by the big drop then. I believe he is talented but I wouldn't want him taking this kind of risk with 'all' of my money.

+++++++++++++
I think he's nuts to have half his portfolio in one stock, AIG.
.

There is an exceptional amount of risk when you have a concentration to the degree that 50% of a portfolio (more or less) is in one stock, which I don't think is really appreciated by the financial media when discussing FAIRX. Not only from the standpoint of something happening to the company, but the risk that the position is difficult to unwind, other funds could try to squeeze you if things become difficult, etc.
Someone can have an exceptional amount of confidence in something, but nothing in investing is certain and 50% in one stock really starts to get to a place where the potential risk is - I think - really unappealing. I could say it's a hedge fund, but I think there's few hedge funds that would effectively take such an "all-in" bet with shareholder money.
Beyond that, I've often said that the financial companies still present a risk from the standpoint of not learning anything from 2008 and continuing to lack transparency. You can talk about book value, but I don't trust that the book value is as stated.
The Kiplinger quote that I often refer to:
A lot of well-known value investors fell on their faces the past year or two. Why did Fairholme hold up as well as it did?
"Maybe it's because I don't invest in things I can't understand....Or take American International Group. If you looked at an AIG annual report six or seven years ago, you saw one paragraph on derivatives. You look at an AIG annual report today and you see 15 pages on derivatives. I don't think company insiders fully understand what's going on, let alone outsiders. So if I don't understand something, I've learned to walk away."
http://www.kiplinger.com/article/investing/T041-C000-S002-a-bargain-hunter-stands-tall.html?page=1
Well, you have Citi's recent scandal, as well as BAC's recent incident. I still think these companies do not know/cannot comprehend the extent of what they have in their books/what's going on in the organization (when too big to fail becomes too big to fully control/comprehend) and that there will be more incidents like BAC's recent announcement.
I still think the full understanding isn't there, but Berkowitz rode the idea that these companies would continue to be supported and catered to long after they were bailed out.
As for Sears Holdings, I've discussed it at great length before. The parts and pieces are worth more than the current price (and that's if everything goes right, there's a mountain to climb between here and there), but I completely disagree with the overly optimistic case.

Bruce once stated he managed his portfolio as if his clients had all of their money invested with him (Wealthtrack interview). In late 2010, I noticed he changed the portfolio drastically; I sold. Fortunately, I did not get hurt by the big drop then. I believe he is talented but I wouldn't want him taking this kind of risk with 'all' of my money.

+++++++++++++
I think he's nuts to have half his portfolio in one stock, AIG.
There are many thousands of stocks to choose from. What's the rationale for putting half of "all of their money" into one stock? Not long ago he had 52% of the portfolio in AIG. 50% in AIG; Names such as Sears, Fannie and Freddie, St. Joe. Bruce is a risk taker. I think he is very smart and very talented, but there's a disconnect between what he says and what he does. He says that Rule Number One is Don't Lose Money, Rule Number Two is don't forget rule number one, and he talks the talk of a risk averse investor. But risk averse investors don't construct a portfolio with ultra concentration to the max, (both with respect to individual names as well as sector concentration), and risky investments like St. Joe, Sears, Freddie and Fannie. I don't consider AIG to be a risky investment, but the amount of it he has imparts the risk. My guess is that he outperforms the market over the long term, but if I were inclined to motion sickness, I wouldn't want to be riding with him as the driver.
@BrianW: you sold in late 2010: excellent timing! Right before a disastrous 2011.
I stayed with Bruce for 11 years, then realized he was not the person I thought he was.

WBMIX up (again) today...0.61%.
Interesting to see their shorts:
Name Position % Symbol
iShares Russell 2000 -7.11 IWM
iShares 20+ Year Treasury Bond -5.75 TLT
American Airlines Group Inc -4.65 AAL
SPDR Barclays High Yield Bond -2.56 JNK
iShares Nasdaq Biotechnology -1.62 IBB
Netflix, Inc. -1.07 NFLX
Texas Industries Inc -0.92 TXI
Amazon.com Inc -0.84 AMZN
Facebook Inc Class A -0.83 FB
Chipotle Mexican Grill, Inc. Class A -0.76 CMG
Cree, Inc. -0.74 CREE
Lennox International, Inc. -0.71 LII
Wynn Resorts Ltd -0.7 WYNN
Toro Company -0.68 TTC
Manhattan Associates, Inc. -0.66 MANH
Dorman Products, Inc. -0.63 DORM
Michael Kors Holdings Ltd -0.62 KORS
Tyler Technologies, Inc. -0.6 TYL
Walgreen Company -0.58 WAG
Equinix, Inc. -0.56 EQIX
Concur Technologies, Inc. -0.55 CNQR
Restoration Hardware Holdings Inc -0.53 RH
Pandora Media Inc -0.53 P
TripAdvisor Inc -0.52 TRIP
Salesforce.com, Inc. -0.49 CRM
AvalonBay Communities Inc -0.48 AVB
Harley-Davidson Inc -0.48 HOG
Sonic Corporation -0.48 SONC
Faro Technologies, Inc. -0.46 FARO
Keurig Green Mountain Inc -0.46 GMCR
Zillow Inc -0.45 Z
Acuity Brands Inc -0.44 AYI
Post Properties Inc -0.43 PPS
Red Robin Gourmet Burgers, Inc. -0.42 RRGB
Xylem Inc -0.42 XYL
Mattress Firm Holding Corp -0.41 MFRM
Boston Beer Company, Inc. Class A -0.4 SAM
EastGroup Properties, Inc. -0.38 EGP
Lululemon Athletica, Inc. -0.37 LULU
Sprouts Farmers Market Inc -0.37 SFM
Core Laboratories N.V. -0.37 CLB
PetMed Express, Inc. -0.36 PETS
Amedisys, Inc. -0.35 AMED
Container Store Group Inc -0.35 TCS

Just looked at it. It gives CGM Focus an A+ down market rating and B up market rating.
As Charles said, hard to follow in the Scribd format.
IIRC, Heebner did very well in 2000 and 2001, which might have gone into their down market performance rating. I agree with davidmoran: "must've been number-crunched and written by Heebner's nephew or something".
CGM Focus was -48% in 2008, vs. -37% for the S&P 500, and it was only up 10.4% in 2009 vs. 26.5% for the S&P 500. It was -26% in 2011, vs. up 2% for the S&P 500.
More often than not, Heebner will be either in the bottom decile or top decile of performance for any given year. I consider him to be a Wild West Gunslinger of the mutual fund world. Yet an unsuspecting very conservative/risk averse investor looking over those tables might see that A+ down market performance and be very attracted to the fund, not wanting to take risk!
His current "risk averse, A+ down market rated" portfolio includes:
19.26% of fund assets in one stock, Morgan Stanley.
32% of fund assets are short US Treasuries !
12% of fund assets in Lennar Corporation
Morningstar says: "he has constructed a nearly 29% stake in homebuilders such as Lennar LEN"

@Scott.
Good grief...

Flying high in April, shot down in May.

Looking at the long term chart of TWTR, I wonder if there was any real long term enthusiasm for this stock? The lock out period kept investors tied to the stock but now that period is over and the price has done a round trip. I am one of those who hasn't fallen for these high flying social media stocks. I prefer something more solid.
http://www.google.com/finance?cid=32086821185414